Tax & Trade Blog

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ANTI-DUMPING MEASURES ON VIETNAMESE GOODS

CORROSION-RESISTANT STEEL SHEETS

Canada has currently imposed eight (8) separate anti-dumping ("AD") and/or countervailing duty ("CVD") orders against products from Vietnam.  These measures effectively raise the price of targeted Vietnamese goods in the Canadian market, reducing their competitiveness in the Canadian marketplace.

Notably, one of such measures is the AD Order on Corrosion-Resistant Steel Sheets from Vietnam, issued under the Canadian International Trade Tribunal’s (the “CITT’s”) Order NQ-2019-002 (the “Order”).  However, this Order is set to expire in November 2025, which means that there may be an opportunity to advocate for their termination under the CITT’s "Sunset Review" process.

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AD/CV DUTIES: LOST IN THE TRANSLATION?

EXPORTERS TO THE US MAY HAVE LOST THEIR WAY RELYING ON CHINESE IMPORTS

We recently had a file come across our desk where a Canadian company was trading in Chinese products and marginally manufacturing them for export to the United States (US).  The company ultimately came under scrutiny from the United States Customs and Border Protection (US CBP) concerning potential duties.  But not the kind of "duties" that everyone is concerned with today (i.e., neither the "Trump Tariffs" or Canada's "Retaliatory Tariffs").

USCBP was concerned with Anti-Dumping and Countervailing Duties on the Chinese goods – totalling almost 200% based on the landed cost of the goods being exported to the US from Canada.

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AIRBNB HOMES SALES SUBJECT TO GST/HST

FCA CONFIRMS SALE OF AIRBNB PROPERTIES SUBJECT TO GST/HST

The Federal Court of Appeal (“FCA”) has recently confirmed a Tax Court of Canada (“TCC”), ruling that the sale of a property used for short term rentals on Airbnb are subject to Federal GST/HST.

In the short term, this decision will increase the cost of properties at a time when real estate prices are already deflated across Canada.  We should expect to see that depreciation hit condominiums.

With proper planning, this tax consequence (i.e., GST/HST applied to the sale of Airbnb properties) can be ameliorated, but experienced GST/HST counsel will be required.

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TRUMP TARIFFS & CANADIAN MADE CARS

HARD TIMES REVING UP FOR CANADIAN AUTOMOTIVE SECTOR

On Wednesday March 25^th, the President signed a proclamation which invoked s. 232 of the Trade Expansion Act of 1962, s. 604 of the Trade Act of 1974 and Section 301 title 3 of the U.S. Code.  This new Executive Order has imposed a 25% tariff on imports of automobiles and certain automobile parts. 

What is a tariff?

A tariff is a duty imposed on the import of goods into a country, usually at a stated percentage, with the importer charged the corresponding amount based on the "value for duty" of the good.  A 25% tariff on a $50,000 car is $12,500.  Tariffs, if paid by a wholesaler or retainer are usually passed on down the supply chain and borne by the final consumer.  In that sense, a tariff functions like a tax; the government imposes a price on goods making those goods more expensive.  The hope is that by increasing the price of foreign goods, citizens will purchase homegrown alternatives.

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RENEWED DUMPING DUTIES ON WINDOW WALLS

CITT CONCLUDES EXPIRY REVIEW ON CHINESE "UNITIZED WALL MODULES"

On March 19, 2025, the Canadian International Trade Tribunal (the “CITT”) announced an Order in Expiry Review RR-2024-001 (the “Order”), continuing its finding of material injury in respect of the dumping of Unitized Wall Modules originating in or exported from the People’s Republic of China (the “Subject Goods”). These goods are used in “curtainwall” or “window wall” systems for the exterior of multi-story buildings.

The Subject Goods

The Subject Goods are defined as:

Unitized wall modules, with or without infill, including fully assembled frames, with or without fasteners, trims, cover caps, window operators, gaskets, load transfer bars, sunshades and anchor assemblies; excluding non-unitized building envelope systems such as stick systems and point-fixing systems originating in/or exported from the People's Republic of China.

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CBSA INVESTIGATING "PET" RESIN AGAIN

POLYETHYLENE TEREPHTHALATE ("PET") RESIN FROM CHINA & PAKISTAN

On March 19, 2025, the Canada Border Services Agency (“CBSA”) issued a Notice of Initiation of Investigation under the Special Import Measures Act (“SIMA”) in respect of the alleged dumping polyethylene terephthalate (“PET”) resin originating in or exported from the People’s Republic of China and the Islamic Republic of Pakistan, and the subsidizing of PET resin originating in or exported from China.   This investigation was prompted by a manufacturer of similar goods in Quebec.

The goods under investigation are more specifically described as: 

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INTERPRETATION ACT - FRIEND & FOE?

FCA RULING CONFIRMS INTERPRETATION ACT CUTS BOTH WAYS FOR TIME DEADLINES

A recent decision of the Federal Court of Appeal, Canada v. Csak, 2025 FCA 60, underscores that the federal Interpretation Act (the “Act”) rules concerning the computation of time for deadlines are complicated, and can both help and harm taxpayers depending on the circumstances.

Taxpayers will need legal advice to determine how the Act’s computation of time rules intersect with various deadlines under the Excise Tax Act (“ETA”) and other federal legislation.  How that intersection plays out may impact taxpayers’ rights.

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NOVA SCOTIA SET TO REDUCE HST RATE

TRANSITIONAL AND PLACE OF SUPPLY RULES MAY AFFECT TAXPAYERS

On April 1, 2025, the Province of Nova Scotia is set to decrease their harmonized sales tax (“HST”) rate by 1 percentage point, resulting in a combined GST/HST rate of 14 percent in the province.  The reduction will put more money in the pockets of Nova Scotians, but individuals and businesses need to be aware of the complex Transitional Rules and Excise Tax Act (“ETA”) place of supply rules to determine to the applicable rate of HST on their transactions.

The Nova Scotia HST Reduction – Background

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TAXATION OF THE INDIGENOUS: COMPLICATED!

MYRIAD OF CANADIAN TAX & DUTY LAWS & OUR INDIGENOUS PEOPLES

One of the more complicated areas of tax and trade law in Canada lies in the intersection of these rules with Canada’s Indigenous Peoples, and their historic rights under sections 87 to 89 of the Indian Act (“the Act”).  A recent case from the Canadian International Trade Tribunal (“CITT”) underscores that point in the context of import obligations.

The Indian Act & Customs Duties

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AUTOMOTIVE REPORT: TARIFF HEADING 9966

CBSA'S VERIFICATION AUDITS TARGET RESTORATION INDUSTRY

A good part of our Tax and Trade practice involves advising Clients in the Automotive Industry on matters involving the application of Canadian taxation and customs duties to motor vehicles and parts.

Recently, we have seen an increase in audits and assessment of automotive restoration businesses, which seem to be currently targeted by the Canada Border Services Agency (“CBSA”).

One focal point seems to be the application of Tariff Concessionary Item 9966.00.00 (“Concessionary Code 9966”), which allows for the duty-free importation of certain vintage vehicles and repair parts.

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TARIFF WAR - ROUND 2

CANADA IMPOSES TARIFFS ON US STEEL AND ALUMINUM

The trade war between Canada and the United States (“US”) has taken a further turn for the worse. On March 12, 2025, President Trump imposed 25 percent tariffs on Canadian steel and aluminum products. Canada has now retaliated in kind, enacting the United States Surtax Order (Steel and Aluminum 2025) , which targets a wide list of US steel and aluminum products with a 25 percent surtax (the “Steel & Aluminum Surtax”). Businesses seeking to understand the scope of the Steel & Aluminum Surtax and mitigate its effects will require assistance from experienced International Trade counsel.

A Brief Review

President Trump, through an executive order on February 11, 2025, previously announced that 25 percent tariffs would be imposed on Canadian steel and aluminum products. 

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A SHOCK TO ONTARIO'S ELECTRICITY EXPORT TAX

PRESIDENT TRUMP VOWS TARIFF RESPONSE, ONTARIO SUSPENDS TAX

As we have previously written about here, there is suggestion that Ontario’s electricity export tax (the “export tax”) may lack constitutional authority to be imposed as a retaliatory measure to the United States’ (“US”) recent tariffs on Canadian goods.  Despite its questionable legality, Premier Ford imposed the export tax on March 10, 2025.  In response, President Trump indicated the US would increase its tariffs on Canadian steel and aluminum to 50 percent on March 12, 2025, which prompted Premier Ford to suspend the export tax shortly thereafter.

In this instance, it appears that Premier Ford’s export tax was a bad idea, much like we suggested here concerning Canada’s second round of retaliatory tariffs.  Accordingly, it might make little sense – both in economic theory and practical terms – to “enflame” the situation further with retaliatory measures when the US is an economic giant whose response can cripple the Canadian economy.

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COMPETITION BUREAU'S BROAD POWERS

FEDERAL COURT OF APPEAL DECISION IS A USEFUL REMINDER OF BASIC PRINCIPLES

On February 12, 2025 the Federal Court of Appeal (“FCA”) issued a decision upholding the Federal Court (“FC”) decision in Empire Company Limited and Sobeys Inc. v. the Attorney General of Canada (2025 FCA 34).  The case dealt with an application for judicial review of a decision of the Commissioner of Competition to commence an inquiry under the Competition Act (the “Act”, the same legislation which defines permissible multi-level marketing plans and illegal pyramid selling schemes in Canada). 

Accordingly, the case serves as a reminder of several principles regarding the Competition Bureau that are relevant to direct selling companies.

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TARIFF RELIEF 101

CANADA'S REMISSION PROCESS MAY LESSEN BURDEN FOR BUSINESSES

Despite the fact that President Trump agreed to a further moratorium on his Trump Tariffs on Canadian goods until April 2, 2025, Canada’s initial round of Retaliatory Tariffs STILL remains in effect! (?)

Businesses affected by Canada’s Retaliatory Tariffs are likely seeking relief from their financial effects and the Canadian government has outlined a remission process that may provide such relief. 

Understanding what a remission order is and how one can request remission from Canadian imposed tariffs may provide businesses with a financial lifeline in the current climate of a turbulent trade war.

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CANADA INVESTIGATING US RENEWABLE DIESEL

CANADA BORDER SERVICES AGENCY INITIATES ANTI-DUMPING INVESTIGATION

On March 6, 2025, Canada announced the start of an anti-dumping investigation on "Renewable Diesel” (A.K.A. hydrogenation-derived renewable diesel or “HDRD”), originating in or exported from the United States of America (the "Renewable Diesel”).

Producers of "Renewable Diesel” – as well as large commodities traders involved in the movement of these goods from the US into the Canadian market-place – will want to get involved quickly in both the CBSA and CITT investigative processes.

This report reviews what that is the case, while providing some background on the mechanics of the expected investigation.

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STAFFING AGENCIES CAUGHT BY EHT!

EMPLOYER HEALTH TAX: THE SMALL TAX WITH THE BIG PUNCH!

As discussed here, our recent file experience demonstrates that provincial governments, like Ontario's Ministry of Finance (“MOF”), are ramping up audits for Employer Health Tax (“EHT”) liability.

One area of recent audit activity has been on Staffing Agencies, temporary employment and similar entities that procure workers for many Canadian and US businesses, contracting them out as effective out-sourced employees.

In an almost counter-intuitive result, recent assessments appear to be targeting Staffing Agencies for EHT due on remuneration paid to remote workers residing outside of the taxing province! (Think of an Ontario Staffing Agency assessed on the wages paid to remote workers residing in BC, with ABSOLUTELY NO connection to Ontario's or its health care services!)

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STATUTORY APPEAL OR JUDICIAL REVIEW?

THE DIFFERENCES & WHY THE FORMER MIGHT BE BETTER!

A recent decision by the Federal Court of Appeal (the “FCA”) has put into focus the distinction between a statutory right of appeal - which might be constrained in scope in some instances - and a judicial review application, which may offer an alternative avenue to deal with those constraints.

Of particular interest is the FCA’s discussion in Best Buy Canada Ltd. v. Canada (Border Services Agency) on why, overall, choosing to proceed solely with a statutory right of appeal might be more beneficial to taxpayers and importers.

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CHINESE SURTAX RELIEF IMPLEMENTED

 REMISSION AVAILABLE FOR SURTAXES ON CERTAIN CHINESE GOODS

As we blogged on previously here and here, the surtaxes imposed on certain Chinese goods imported into Canada have the potential to place undue burdens on Canadian businesses relying on those products. 

The recently implemented China Surtax Remission Order (2024) (the “Order”) provides much needed remission for Canadian businesses.  Continue reading this Report for more details.

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"RETALIATORY TARIFFS - STILL A BAD IDEA?

UNILATERAL FREE TRADE WOULD BE A BETTER ECONOMIC IDEA

 The trade relationship between the United States (“US”) and Canada has eroded with tensions devolving into a trade war.

As of today, the US imposed tariffs on Canadian goods appear to be "off again" until April 2^nd, but Canada's first round of "retaliation tariffs" are still "on" ("CT-R1").   That is strange.  Canada is "on" despite no current US tariffs to retaliate against?  Is Canada now the sole aggressor?

Should this on-again-off-again trade war continue to escalate, the US will likely impose even further reciprocal tariffs on Canadian goods, along with additional tariffs on Canadian steel and aluminum products, and timber, lumber and derivative products. In turn, Canada is planning to implement a more robust second round of tariffs targetting an additional $125 billion in US goods ("CT-R2").  

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US CBP AUDITS TARGETING CANADIANS?

CANADIAN EXPORTERS SUBJECT TO US CBP REVIEW, AUDIT & INVESTIGATION!

Current US vs. Canada trade tensions may be extending into US Customs & Border Protection ("CBP") audit, review and investigative activities – at least as they relate to exports to the US from Canada.

Viewed from the US perspective, these are "imported goods", and are required to be imported to the US correctly.

We have seen an uptick in US CBP inquiries, audits, reviews and investigations of Canadian businesses selling into the US, and that should be raising an alarm for all Canadian exporters.